IBC Resolution Plan Extinguishes All Non-Included Claims | NCLT

Case Details: Stressed Assets Stabilization Fund vs. Krystal Stone Exports Limited [2026] 184 taxmann.com 166 (NCLT-Mum.)

Judiciary and Counsel Details

• Sushil Mahadeorao Kochey, Judicial Member & Prabhat Kumar, Technical Member
• Pulkit Sharma, Rehan Agarwal & Tejas Madhavi, Advs. for the Applicant.
• Mily Ghoshal, Kamal Deep Tyagi, Advs. & Shweta Thanekar, Ld. Counsel for the Respondent.

Facts of the Case

In the instant case, the CIRP was initiated against the corporate debtor. The CoC approved the resolution plan submitted by SRA. The RP filed an application for the approval of the resolution plan.

It was noted that RP had complied with requirement of Code in terms of Section 30(2)(a) to 30(2)(f) of the IBC and Regulations 38(1), 38(1)(a), 38(2)(a), 38(2)(b), 38(2)(c) & 38(3) of CIRP Regulations. Further, SRA was not hit by any of the disqualifications under Section 29A of the IBC.

NCLT Held

The NCLT observed that since the commercial wisdom of CoC in approving a Resolution Plan has been consistently held to be non-justiciable, save and except to a limited extent provided under Section 30(2) and Section 31, SRA not presently being in business could not, by itself, be a ground to reject the Resolution Plan.

Further, the NCLT observed that since the Resolution Plan had been approved by the CoC with the requisite majority after due consideration of feasibility and viability, the same was to be approved.

The NCLT held that the approval of the Resolution Plan would not be construed as a waiver of any statutory obligations/liabilities of the Corporate Applicant, and that the appropriate Authorities would deal with such matters in accordance with the law.

Further, the NCLT held that, on the date of approval of the resolution plan by the Adjudicating Authority, all such claims, which were not a part of the resolution plan, would stand extinguished and no person would be entitled to initiate or continue any proceedings in respect to a claim, which was not part of the resolution plan.

Consequently, all dues, including statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, would stand extinguished, and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 of the IBC could be continued.

List of Cases Reviewed

• Ghanashyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132 (SC)/[2021] 166 SCL 237 (SC)
• Municipal Corporation of Greater Mumbai (MCGM) v. Abhilash Lal [2019] 111 taxmann.com 405 (SC)/[2020] 157 SCL 477 (SC) (para 28) followed

List of Cases Referred to

• Arcelormittal India (P.) Ltd. v. Satish Kumar Gupta [2018] 98 taxmann.com 99 (SC)/[2018] 150 SCL 354 (SC) (para 25)
• Ghanashyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132 (SC)/[2021] 166 SCL 237 (SC) (para 28)
• Municipal Corporation of Greater Mumbai (MCGM) v. Abhilash Lal [2019] 111 taxmann.com 405 (SC)/[2020] 157 SCL 477 (SC) (para 28)
• K. Sashidhar v. Indian Overseas Bank [2019] 102 taxmann.com 139 (SC)/[2019] 152 SCL 312 (SC) (para 29).